Inside Market Conditions

Commentary on what's going on in the Northern Virginia and DC Metro real estate markets.
There are 51 articles written on this subject. The most recent 10 are listed here:

Northern Virginia New Construction Activity Has anyone noticed? Who's right? Maybe both. If it moves, track it... Price Trends Added to Daily Market Watch

Prince William County added to Daily Market Watch A well stated perspective on market forecasting My prediction for the 2007 local housing market NAR Reports 3rd Quarter Home Sales October Market Data Released

You will find a complete Index of Articles by Category and by Month in the Archives.

December 14, 2006

ANNOUNCEMENT:
Prince William County, Virginia, one of the largest counties in Northern Virginia and a magnet for homeowners outside the Washington Metro area and the beltway, is added to the Daily Market Watch. Only the tables are implemented as of this date with charts to come soon. Charts implemented December 13, 2006 at Prince William Daily Market Watch.

Initial Observations:

• Active Inventory is higher than Loudoun County
• Average Days on market (domp) is slightly lower than Loudoun
• Average sold price is about $100,000 less (more affordable?)
• The absorption rate is lower than Loudoun and Fairfax indicating greater weakness
• Buyer Intensity is also more negative

All criteria for extracting data is the same as Fairfax and Loudoun counties.

Other Changes:
The LIST PRICE is added to each data category. I will eventually have these charted as well (as time and coding expertise permits). I spent the better part of this morning and afternoon getting the above additions debugged to display properly. Sorry for the delay.

Enjoy!

Comment on Prince William County added to Daily Market Watch. Follow this article with this link. More articles like this one filed in: Market Conditions , Prince William County Market News

December 1, 2006

Finding a great Blog is intriguing because I get to read all the good stuff that I missed not knowing about it. This is a case in point. Steve Berg of the San Diego Home Blog (and husband of Kris Berg, see a previous article) wrote this piece on Bubbleheads, Prognosticators and Shrinkage. Here is the closing paragraph:

The moral of this story is that trying to anticipate the future market and precisely when may be the perfect time to buy or sell is a losing proposition. We, as agents, do have an advantage over all those who are writing the doom and gloom newspaper articles and preparing economic forecasts with only the objective historical data (think Zillow). Our advantage is embodied in the instincts we derive from the everyday "in the trenches" experiences we have simply by listening to buyers and sellers. It might be a mistake to ignore the benefits of these experiences.

I could not have said it better.

Comment on A well stated perspective on market forecasting. Follow this article with this link. More articles like this one filed in: Buying & Selling Real Estate , Market Conditions , REALTORS®

November 30, 2006

Jennifer posed a relevant question in her comment entry. It is so timely it deserved this article.

Merv - As one of the realtors in this area who analyzes data how are the Fairfax and Loudoun markets doing? And what can we expect in 2007?

Jennifer, great question! I assume when you say this area you are in the DC Metro area. But, it doesn't really matter. Here's my take:

Current
Fairfax and Loudoun have very similar patterns of buying and selling, Fairfax just a bit more robust than Loudoun today. You can see this in all the charts we produce. Inventory is dropping rather rapidly in both counties. Not because of more selling. Sellers are just not re-listing when expired or withdrawn and new sellers (maybe discretionary) are gathering on the sidelines waiting for the spring market.

On to 2007
No one can predict tomorrow much less 3 to 6 months from now (sorry for the attention grabbing title). But, that being said, I'll tell you and all our readers what won't surprise me.

About Sellers
It would not surprise me to see a flood of new listings starting late February, early March causing inventory to rise significantly. It would not surprise me to see prices come down another 10 to 12% next year. I believe it will remain a buyers market well into 2008. (Added Dec 1, 2006): By the way, I don't consider this a housing crash. Just a rollback to early 2005 prices adjusting for the unrealistically intense sellers market of 2004 and 2005.

About buyers
There seems to be pent up demand but most are fearful that the market will fall more and are waiting on the sidelines watching. More importantly, most buyers have a home to sell into this slow market and understand that a contract offer with a home sale contingency just won't fly, I call it the the Domino Effect (DE). Question: How many contingencies in the chain is too many? Answer: One. Buyers that can enter this market unencumbered can make some incredible deals but, only a few are.

OK. There you have it. Now just sit back and watch reality take place before our collective eyes. You will see the real numbers here first. Day in and day out. Period.

I strongly believe it is our job to put the numbers into perspective with real world, on-the-ground experience. No amount of crunching historic numbers up to and including this moment in time replaces our collective experience of what we see doing our jobs serving real clients.

Thanks for the question. It's good to have this dialog with fellow professionals. We will bolster our credibility by sharing our collective experiences. Have a g'day!

Comment on My prediction for the 2007 local housing market. Follow this article with this link. More articles like this one filed in: Buying & Selling Real Estate , Market Conditions , Opinions

November 28, 2006

Thanks to sellsius we have a link to NAR's third quarter report on CNN Money.com.

Need to check out Salem, Oregon. Hot. Hot. Hot. Hard to believe the average price of a home in SF Bay area and Orange County, CA is around 3/4's of a million bucks (that's $750,000)! Now that I think about it, we're not that far behind. Maybe the bubble breaking will get things back to a more sensible level. Virginia sales are down 24% this year. You can find Condo data there too.

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November 10, 2006

October market data was released this morning by MRIS. All our Fairfax and Loudoun Charts are updated. Our commentary will be published later today.

Charts can be found in the Topic: Market Conditions

Comment on October Market Data Released. Follow this article is off. More articles like this one filed in: Market Conditions

November 9, 2006

Here is a quick snapshot of how the New Construction Builders are fairing in this sluggish market. The data includes Condos and Single Family homes (attached and detached). Loudoun County is being hammered much harder than Fairfax. $1,000,000 plus homes are much slower moving. In recent news, builders are reporting that contract cancellations have increased to unprecedented levels. Also in the news, builders are substantially lowering their earnings forecasts.

NEW CONSTRUCTION MARKET SNAPSHOT [Nov 9]

Total		Fairfax	domp	List Price	Loudoun	domp	List Price
Listings		626	148	$1,372K	681	213	$780K
Contracts		100	135	$1,374K	22	158	$904K
New Activity (in the last 30 days):
Listings		129	31	$1,222K	106	30	$755K
Re-List		17	136	$1,865K	13	134	$659K
Contracts		36	132	$1,112K	12	230	$873K
Sold		53	67	$934K	37	65	$765K
Expired		24	144	$996K	21	161	$711K
Withdrawn		93	116	$1,037K	102	219	$775K
Absorption Rate			6%/mo			2%/mo
Buyer Intensity			-0.86			-0.93
Current Average Price with SOLD Ratios:
ORIG Price		$942K	97.6%		$783K	95.3%
LIST Price		$934K	98.4%		$765K	97.5%
SOLD Price		$919K	---		$746K	---

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October 2, 2006

I extract sales data every morning and update the Daily Market Watch and corresponding charts. I am surprised that no one is looking at the charts and figuring out what is happening. In the last 30 days, the average sold price of resale properties dropped 7% in Fairfax County and 6% in Loudoun County. Look at the charts: Fairfax ... Loudoun. A 20% drop in average price this year looks more and more realistic.

Average sales price in Fairfax for RESALE properties dropped below $500,000 for the first time since February, 2005.

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October 1, 2006

We hear different forecasts from economists as to what the future holds for the real estate market. Here are two views published this morning in The Washington Post's special "Mega Real Estate Section." I can find points in both views that I agree with. Wheaton expects a 5% to 20% price drop depending on the market area while McClain looks at history and the macro economics of the region and predicts a flattening or slight decrease before a return to a normal moderate rate of growth next spring.

Signs Point to Continued Slowing
Sunday, October 1, 2006; Page R03
William C. Wheaton
Professor of economics and research director, Center for Real Estate at the Massachusetts Institute of Technology

Should you buy a house now? All around the country, prices are stalling or falling. In theory, the answer could vary depending on your situation. Here are the most common ones.

or...

Make Way for Moderation
Sunday, October 1, 2006; Page R03
John McClain
Senior fellow and deputy director, Center for Regional Analysis at George Mason University

There is no longer a question among local housing researchers about when the market is going to cool -- the cooling is here. Prices have ceased their yearly double-digit percentage increases, the number of sales has fallen, and the time it takes to sell a house has tripled. The questions now are how much the market will cool, whether prices will fall and when this market adjustment will be over.

The Post's intro to these articles uses terms like "returning to normal" and "headed for a bust." Neither of these economists forecast a bust. Even a 20% decline in average price is NOT A BUST! It is simply a return to early 2005 pricing. If a homeowner bought two or more years ago (and not leveraged all of the equity), there is a paper gain, not a loss. Using sensational terms and words may sell newspapers but does nothing to put the current situation into proper perspective.

On another note, Wheaton makes the following statement: "I would discourage households from making discretionary moves unless they absolutely have to." If you absolutely have to, it is not discretionary. Otherwise I agree with the statement.

On a final note (nothing to do with real estate), washingtonpost.com would do itself and all of us a favor by getting rid of those highly annoying pop-up and pop-under ads. Seems as though I had to turn pop-up blocking off on their site to get to content I wanted. Then wham...the floodgate was open.

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September 28, 2006

Tracking the real estate market in an attempt to understand what is really going on is an unending quest of the Guide. A recent subject in the blog world that received a tremendous amount of attention is the practice of "re-listing." Simply defined: deliberately withdrawing a listing, changing something (usually price) and re-entering into the MLS as a new listing. Some say this is a misleading practice. Others say it's just marketing.

Our MLS (MRIS) in the greater DC Metro area solved this problem long ago. We track two important numbers: DOMM and DOMP. DOMP is the total time a listing has been active regardless of how many times it was "re-listed" (as long as the tax ID address is the same). DOMM is the time a specific listing has been on the market. A property must be off the market for 180 days before DOMP will be reset to zero.

There are those that will always try to game the system for some marketing or client advantage and do so regularly. I'll let others pass judgement on the ethical issues of "gaming." I don't see that it really gets anything accomplished. Most good agents and buyers are smart enough to see through gaming activity. One of the most frequent questions we get on our listings is "how long has it been on the market and why?" We tell the truth.

I have cautioned our readers about re-listing as it effects the inventory trends and original list price in the data we publish. So, starting today we are tracking re-listing activity in the Daily Market Watch. Some definitions:

Under "New Activity" "Activity in last 30 days"

• Listings: these are all listings that were listed in the last 30 days from today.
• Re-List: same as Listings except, if DOMP is greater than 30 days it gets counted here.

So, Re-Lists are contained in Listings. For Fairfax today, re-lists are about 27% of new listings (look at DOMP in the table). For Loudoun, re-lists are about 35% of new listings. These could be intentional re-lists for marketing purposes or they can be simple an expired or withdrawn listing coming back on the market with new terms or a new agent.

Comment on If it moves, track it.... Follow this article is off. More articles like this one filed in: Market Conditions

September 26, 2006

Price trends are now available on the Daily Market Watch charts for Loudoun and Fairfax counties. The charts show trends of Original List Price and Sold price. I didn't go back in time to collect daily samples. I did take a sample on Aug, 1, Aug 15, Sept 1 and Sept 15. Like the other charts, new construction was included prior to Sept 1.

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